9/8/2026
By Karina Hernandez, Senior Research Analyst

The Rate Narrative Just Broke

August was a month of whiplash, with a plethora of events that moved income portfolios, such as the tensions in the Middle East, which led to a fresh spike in oil prices, and the 10-year yield reaching its highest level since late 2023 after a blockbuster August jobs report, which has now changed the narrative to a possible rate hike in September. 

August scrambled the thesis of a rate cut after Fed Warsh’s Jackson Hole speech marked a hawkish pivot, warning the Fed still has “work to do” on inflation after the Producer Price Index (PPI) Core reaccelerated to a three-year high near 4.2%.

Bonds are a real competition again, as the 10-year yield sits at 4.8%, giving income investors a risk-free alternative to equity dividends for the first time over a decade.

S&P 500 (SPX) earnings yield is sitting at its lowest level on record. This could be due to a  composition effect, as mega-cap, low/no dividend growth, and tech names now dominate the index’s market capitalization (market cap).

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Karina Hernandez
Wall Street Strategies